Vancouver, British Columbia, Canada
Keh.com has some of the older G-series cameras used, some like the G10 for about $250. The noise in the blacks can be bad, but for someone starting out it gives them enough flexibility to allow them to learn the basics of manual shooting with a decent megapixel count and it is small enough that they might actual have it with them for more spontaneous shooting.
I think you can get some of the original micro 4/3 cameras in that price range used also.
The 'premium point n shoot' category, which is where a $400 P&S falls, is pretty quickly becoming redundant. Squeezed out by smartphones on the left and compact mirrorless cameras on the right. I loved my LX-3, but quickly got bored with the Lx-5, and totally missed the launch of the LX-7.
I think nowadays you can spend $400 better and still stay portable.
For the times when I don't want to carry around a DSLR, I really love my Olympus XZ-1. It's not something I would use for llama shoots, and if you pixel peep, the image quality isn't on par with a DSLR, but for stuff like vacation photos or even street shooting, it's very small, light, and fast. You can shoot RAW, it has a fast (f1.8) sharp lens, and is pretty easy to use. ISO past 800 is pretty noisy, but with the f1.8 lens, you won't need to go there in most situations. It's max shutter speed is kind of low (1/2000), but it has a built in ND filter to compensate for that. It will also do video. I can't speak to that, since I never use it.
Here are a couple of sets of vacation photos I've taken with it.
The Olympus XZ-1 is getting closed out right now for around
$270 @ most places...Superb pocket camera w/28-112mm 1.8 Zuiko zoom,
large sensor (for it's class!),lot's of Pro level controls,hot shoe AND built-in flash,
and you can add an EVF if you want a viewfinder.
It's a very cool little camera!!!...DPReview gave it a gold award...good enough for me!
Very compact, stylish, great image quality, fuji skintones, incredible dynamic range (a little over 12 stops when shot in the 6mp pixel binning modes), exposure compensation dial, AF mode dial, dials for aperture and shutter speed, standard hotshoe, leaf shutter (up to 1/4000th sync speed with strobes, depending on the capabilities of your triggers/lighting), real and usable optical viewfinder, fast glass that STAYS fast on the telephoto end (f2 - f2.8). The sensor may not be as large as a G1X, but then the G1X is also considerably bulkier and a little over two stops slower on the telephoto end.
Google: Ryan McGinley, Victor Vauthier, Terry Richardson
The T3 is pretty good too. I have a few friends, all anal artsy-types, that use that.
The XZ-1 is probably the best bet. I think the G15 is a better camera, but it's a lot more right now, assuming you can snag an XZ-1 before they all go away. When it was new, and the same price at the G12, not so much.